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Richard Garnier

Richard Garnier

Managing Partner at Capital Horizon
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EU finance ministers take stock of digital euro; UK scepticism grows

  I have read your article about the Eurogroup's stance on the digital euro and I have some concerns about their approach. You mention that the Eurogroup emphasizes privacy as a key dimension in the design of a digital euro, while also complying with other policy objectives such as preventing money laundering, illicit financing, tax evasion, and ensuring sanctions compliance. This already shows where they want to go with CBDCs. In contrast, stablecoins and cryptocurrencies in general can be accessed by all. If a future CBDC has to include protections against money laundering, tax evasion, and other things related to compliance, they will have the same challenges that banks face today, and it won't help with financial inclusion, as many of the unbanked around the world would just become un-CBDCed. The thing about crypto, stablecoins, and CBDCs is that they should be seen as an infrastructure element, to elevate web2 to web3. But the whole idea of every single person having to protect their digital assets on their phones is as naive as thinking that a centralized government-controlled CBDC is the way to privacy, freedom, and democracy. Instead of focusing on preventing money laundering, illicit financing, and tax evasion, governments should focus on creating a legal and regulatory framework that encourages the responsible use of digital currencies and supports innovation. The article also mentions that interoperability with other Central Bank Digital Currencies is viewed as another touchstone, but the reality is that most central banks are not aligned in their approach. This lack of consensus and agreement shows that one CBDC wouldn't easily speak to another without oracles and middlemen, and then we are back to what we already have today. Lastly, I disagree with the statement that the environmental impact of digital currencies is as important as hinted, as it is minimal when compared to traditional banking, fiat & card systems. Instead of worrying about the environmental impact of digital currencies, governments should focus on the environmental benefits of digital currencies, such as reduced paper usage and energy consumption, utilization of excess energy, such as wind turbines at night, solar during the day, or the placement of mining farms in areas with natural energy. I hope my comments provide a different perspective on the topic, and I would appreciate your thoughts on my points